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Pay-Per-Click Advertising: What is PPC? And How does it work?

After you build a website, you might wonder what’s the best way to drive traffic to it. You can explore many different options like search engine optimization (SEO) and social media, but one of the most effective and quick ways to drive traffic is pay-per-click (PPC).

In this article, we’ll go over the basics of PPC advertising and how it works, from the best platforms to use and how to conduct keyword research to optimize your campaigns. 

What is PPC?

Pay-per-click, or PPC, is a form of advertising that allows you to pay a fee to have your website on the search engine results page (SERP) when someone types in specific keywords or phrases to the search engine. The SERP will display ads you create to direct visitors to your website, and the fee you pay is based on whether people click your ad. 

Advertisers use PPC ads to gather more leads, increase sales, or increase awareness about their brand’s product or services. Since PPC ads’ goal varies, they can either target a set audience or budget or rank based on predetermined keywords. 

If you’re wondering where you can find pay-per-click ads, they’re the results you see before and to the right of the organic search results. For example, check out the ad that came up in my search for “shoes.” The first four search engine results are ads, then they are followed by an organic search. You can also see that the shopping cards to the right of the results are all ads. 

How Does PPC Advertising Work?

In pay-per-click advertising, ads are subject to a bidding system called the Ad Auction. It’s an automated process followed by major search engines to determine the validity and relevance of the ads that appear on the search engine results page. 

At the auction, advertisers bid on keywords that are relevant to their business. For example, if your business sells shoes, you will want to bid on the keyword “best running shoes.” Use keyword search tools to find relevant keywords with the right volume and the average cost per click. 

Once you have the relevant keywords, create an ad and set it up in the search engine platform. Add the keywords that you want the ads to trigger for. Set the bids for how high up in the ad section of the search results in your ad will show. Apart from bid price, the advertising platform also looks at factors such as quality score and ad extensions to determine which ad is suited for the highest position. For example, the quality score sums up the quality of your ad based on ad relevance, landing page experience, and click-through rate.

When a user submits the search query, there’s a complex algorithmic calculation done by the search engine based on the Ad Auction. The results of these calculations determine the ads displayed, their order, and by which advertiser. 

SEO vs. PPC: What’s the difference?

SEO refers to the process of optimizing your website to rank high and gain free traffic from search engines. On the other hand, you’ll have to pay for clicks with PPC. Although different, businesses see the best results when they align SEO and PPC in their marketing.

Best PPC Platforms

Several PPC platforms exist, but for the most part, when we talk about PPC, we’re referring to either Google Ads or Microsoft Advertising (Bing).

Google Ads

Advertising on Google needs no introduction; it’s the platform of choice for advertisers who want to present their ads to the broadest possible audience. However, since 86.6% of people turn to Google to search for answers to their questions and to run their ads, it’s highly competitive, and Google ads can cost more than on other platforms.

Microsoft Advertising

Microsoft holds nearly a 3% share of the search engine market. The audience isn’t as wide, but that also means you’ll spend less on clicks. Many advertisers use Microsoft Advertising as a secondary platform for their PPC campaign to cover more grounds. 

Facebook Ads

Facebook Ads is a popular and effective platform for paid ads (more commonly used as CPM than CPC), mainly due to its specific targeting options. Facebook allows you to target users based on interests, demographics, location, and behaviors.

Also, Facebook allows for native ads, which means ads are introduced and blend into the social feed. Not to mention, you can use Facebook Ads to advertise on Instagram as well.

Benefits of PPC

There are many compelling benefits of pay-per-click advertising:

  • PPC is measurable and trackable. You can see how your campaigns are performing, including impressions, clicks, and conversions, the traffic you’re receiving, and how the results correlate to your budget
  • It provides a better understanding of the behavior and search patterns of the customers
  • Unlike SEO, PPC allows you to quickly set up campaigns, create ads and find new customers and prospects
  • You get budget flexibility. You can set up your ad budget and choose how much you want to spend. For example, you can scale up quickly if you see positive results.
  • You get a wealth of targeting options, whether targeting keywords through search ads or focusing on a specific demographic on the display network.
  • Your ads work on all platforms, including mobile and desktop devices

Best Practices for Running PPC Campaigns

Below you’ll find some crucial tips and methods to keep in mind when setting up a PPC campaign.

Conduct keyword research.

Keyword research is the most crucial part of creating your first PPC campaign. To start, focus on specific terms that are relevant to your niche. Then, slowly expand to include less common words that users might still search for. Excluding negative keywords to your PPC campaign ensures you save your ad budget on clicks that won’t bring you, users.

Similarly, create a list of branded keywords that users might search for. Branded keywords are search terms that include your brand’s name, a competitor’s brand name, or something similar (including common misspellings). 

Set the right budget.

To begin the ad auction process, set a budget for each keyword. Your budget can determine whether or not your ad has a good chance of winning an auction, so research keywords thoroughly to ensure you’re paying for those that will most likely garner clicks.

When deciding on keywords to focus on, you’ll set a budget for each keyword or ad group. This will be the maximum cost-per-click (CPC) amount of each bid. For example, if you set your budget at $1.00 for a specific keyword, you’ll pay for every click. You might pay $0.50 most of the time, but $1.00 is the most you’ll pay.

Create quality ads.

When running a PPC campaign, target the right keywords and ensure your content is relevant to the query.  Aside from your maximum CPC, other factors determining whether your ad will appear on a SERP include quality score and ad rank. Below is a great example of Apple’s Google Ad copy. 

How to Target Your Audience With PPC Advertising

Google allows you to tailor your audience, so you save marketing dollars and get in front of the right people. You can upload a customer list, so you don’t waste money on people who have already bought from you.

Google also has options for prospecting audiences. For instance, In-Market Audiences employs user behavior tracking to put you in front of prospects in the market for a product or service like yours.

You can also increase your bid for more relevant subgroups within your target audience — a practice called layering audiences. 

By targeting your ads to be highly specific, you have a higher chance of someone seeing your ad at exactly the right time. For example, suppose you know your audience shops online from their phones in the evenings, and they’re between the ages of 25-45. You can set specific ad parameters to target those customers exactly in that case.

How to Manage and Optimize Your PPC Campaigns

Running PPC campaigns as a “set it and forget it” model won’t work; you must regularly monitor and update your campaign to get the desired results. When setting your goals, choose key performance indicators (KPIs) to measure if your campaign yields desired results.

Optimizing your campaign involves trial and error to see what keywords users engage with, what time of the week or day they’re most active, what ads cost you the most, and which ones bring you the most traffic. Overall, any advertiser’s goal with a PPC campaign is to generate the best results with the lowest cost per click.

Bottom Line

Whether you just started your business yesterday or have been around for decades, PPC might be the boost you need to get an edge on your competition — or at least ahead of them in the SERPs. 

Applying the lessons in this guide about building a PPC campaign and the best practices for a quality PPC strategy would set you well on your way to improving your website’s traffic and conversions.

Thanks for reading! Next week’s blog will share tips to create an effective paid marketing strategy. Follow me on LinkedIn, Facebook, and Twitter to get updates! If you enjoyed reading this article, please share it with friends, family, and colleagues.

 

References

Burton, W. (2021, May 12). Google vs Microsoft Bing: A detailed comparison of two search engines. Search Engine Journal. Retrieved February 13, 2023, from https://www.searchenginejournal.com/google-vs-microsoft-bing/

Google. (2014, January). In-market audiences – think with google. In-Market Audiences. Retrieved February 13, 2023, from https://www.thinkwithgoogle.com/marketing-strategies/search/in-market-audiences/

Google. (n.d.). Create and edit audiences. Google. Retrieved February 13, 2023, from https://support.google.com/analytics/?hl=en

Jesus Reyes

I am a full-time Digital Marketing Specialist that focuses on creating effective online campaigns for products and services. Additionally, I excel at driving traffic to websites via SEO and PPC strategies. I aim to provide valuable content for individuals who are looking to expand their knowledge on paid marketing.

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